FairTax Letter To WSJ Re VATs

Most of you know that BO is floating the idea of adding a European style VAT to our tax system - virtually all European countries have a VAT & also have an income tax. Uninformed people confuse a VAT with the FairTax. One of the main differences between the two is that the FairTax will not add but rather will replace all of the IRS taxes with a national consumption tax @ the retail sales level & is charged only once on new goods & services purchased above the poverty line.

VATs are added @ every stage of the production process & hide the tax cost of goods. Politicians thrive on dependency and an opaque tax system so a VAT is a natural for BO to want to add to our 70,000 page tax code as he tries to impose Europe's stagnant & declining standard of living on America in favor of immense government. By eliminating the IRS taxes the FairTax strips out today's embedded taxes from the costs that are part of goods & services sold in America. Thanks to their opacity increases in VATs can be misinterpreted as inflation by an unsuspecting public.

Below is a letter to the editor of the WSJ that I wrote in response to Daniel Mitchell's op-ed entitled "VATs Mean Big Government."

Dear Editor,

Daniel Mitchell's op-ed reminds me of President Reagan saying of Walter Mondale that "my opponent has never met a tax he didn't like - or hike." Now with the newfound thought of revenue from a VAT we can add another tax to the list of "like" & eventually "hike."

Mr. Mitchell accurately describes the poison of our progressive income tax system, which is point #2 in Karl Marx's Communist Manifesto for bringing about a true communist society.

Rather than add a VAT to all of our current taxes we should enact The FairTax under HR 25 to replace all of the IRS administered taxes. VATs hide taxes @ every stage of production. Income tax rates increase when politicians convince one sector of the citizenry that someone else will be paying the higher taxes - which of course never materializes to the detriment of the middle class. The FairTax passes the four key test questions that must be answered - it is transparent, efficient, promotes economic growth, & is fair.

Just take Mr. Mitchell's point about the unsustainability of Social Security & Medicare growth. Consumption is over twice the size of taxable income ($8.8T in 2005 vs $4.2T) & as the wage earning base dwindles the consumption base will remain much steadier than the taxable income base thereby meaning that enacting the FairTax will actually strengthen the entitlement programs' solvencies.